PPHE ups full-year guidance after strong H1

PPHE Hotel Group has upped its full-year guidance following a strong period of trading in H1, and now expects to deliver FY23 revenues of at least £400m and EBITDA of at least £120m. This is ahead of previous market consensus that predicted full-year revenues of between £352m and £370m, with an EBITDA range of £106.3m to £111m. Following a period of strong trading and momentum, the group also anticipates that H1 revenue will be in excess of £177m, against £155m in pre-Covid H1 2019, while REVPAR is anticipated to be around £109, against £93 in pre-Covid H1 2019. In a pre-close trading update for the three months ended 30 June 2023, the group said strong trading conditions and forward booking momentum seen in Q1 remained through Q2 and into Q3 across leisure, corporate travel and meetings and events. The UK and The Netherlands remained the strongest performing regions in the period, driven by both a continuing rate growth and broad occupancy recovery. The German region had a slower start to the year but saw an improving trend in bookings through Q2. Looking ahead, the group said forward booking momentum remains “encouraging”, and revenue contribution from its recently refurbished and relaunched properties are expected to be “significant”. Nonetheless, it warned its EBITDA margins have been impacted by both broader operating cost inflation and, particularly, energy cost inflation over the last six months. Despite warning that FY23 will also see a margin impact from elevated energy costs, the group anticipates that this effect will diminish through FY24 and beyond, as forward energy cost hedges flow through at “substantially lower levels” than those fixed for FY 2023. Consequently, it expects EBITDA margins to normalise following FY23, notwithstanding the broader cost inflation that has been successfully absorbed over the last 12 months. Boris Ivesha, president and CEO, PPHE Hotel Group said: “We are delighted with the strong momentum in the business during the first half which has enabled us to upgrade our outlook for the remainder of the year. “Our teams have continued to focus on driving performance and delivering exemplary service to our guests, and our strategic property investments prior to – and during – the pandemic have put us in an excellent position to deliver further growth across all our markets in the future.” He added: “As we enter the second half of the year, we are preparing to launch four new property concepts, scheduled to open between September 2023 and the first half of 2024. “These will be exciting new propositions for our customers, including our first Radisson RED property in Belgrade, Serbia as well as three new art’otels stretching from Zagreb to Rome and London. We remain committed to delivering significant value for shareholders, and we look forward to sharing more detail at the H1 2023 results in August.”